What AMP's latest survey reveals

Too many New Zealanders looking forward
to holidays, leisure activities and buying a
late model car – on less than $32 a day.

Friday, October 19th 2001, 10:47AM

More than 9 out of 10
New Zealanders recognise the need to save for their own retirement.

But only half of them
say they’re doing anything about it.

Three out of four New Zealanders say the
current superannuation of $223/$339 per week* won’t be adequate
to support them in their retirement. (*
The current single living alone and married rate of NZS tax paid.)

Three out of four New Zealanders
aren’t confident that when they retire, they’ll get
a similar level of government pension to what’s available
today.

Too many New Zealanders are not saving
anything for retirement.

These are the key findings from the latest
AMP SuperWatch survey of 502 New Zealanders completed over
a six-month period in August 2001.

"What the latest SuperWatch
research shows is that attitudes and behaviours have barely moved
in the past year since the last survey took place. Too many New
Zealanders are still thinking ‘she’ll be right’,"
says Linda McCulloch, Head of Superannuation Strategy for AMP.

She says that New Zealanders know they have
to save over and above what the government might provide, but
less than half are actually doing anything about it.

"What’s really interesting is,
that when asked about the sorts of activities New Zealanders anticipate
enjoying in retirement, many people expect to travel, pay for
leisure activities, financially assist their families and buy
a late model car.

"Hardly likely on the handful of dollars
they’ll receive if New Zealand Superannuation is their only
income in retirement.

"If these people aren’t saving
now, then their biggest purchasing decision in retirement is likely
to be whether they can afford new winter shoes – never mind
the car or travel – on what may well be less than the current
rate of around $32 a day ($48 a day for a married couple)."

Linda McCulloch says Superwatch shows
that too many New Zealanders are not converting realisation to
action.

"The inevitability is they’ll
live for more than 20 years in retirement at just above poverty
level, because New Zealand Superannuation is a safety-net pension,
not a fund for holidays or cars.

"The challenge of retirement saving
is not getting it onto the agendas of New Zealanders. It’s
already there. The challenge is in stirring New Zealanders into
action.

"We know that New Zealanders recognise
the need to save. The challenge the Government now faces is to
lead the way and create an environment in which we feel empowered
to set aside savings for the future. Our own future and New Zealand’s
future," says Linda McCulloch.

The OECD has identified the most effective
model for superannuation as:

a safety-net age pension

provision for workplace saving

voluntary personal savings.

Linda McCulloch says the Government may
have passed the Superannuation Bill and committed the funds, but
that’s only part one of the equation.

"Now the Government needs to put a
well-planned strategy together to encourage individuals to save,
and to put it at the top of its list. "

Full Superwatch findings follow

SUPERWATCH
2001

August

July 2000 N=474, August 2001 N=502.

Which one of the following are you currently
saving for?

July 2000

August 2001

Paying off your house

42%

38%

A new car

14%

11%

Travel or holidays

39%

36%

Superannuation/retirement

49%

46%

Setting up or investing in your
own business

14%

12%

Your own or your children’s
education

32%

27%

A deposit for a home purchase

14%

13%

None

11%

15%

Don’t know

-

1%

All Respondents

(474)

(502)

A significant change from
2000 to 2001 is fewer people currently saving for their own or
their children’s education (significant at the 90% level).

And which of these are your two most
important priorities for saving?

July 2000

August 2001

Paying off your house

61%

55%

A new car

7%

4%

Travel or holidays

27%

23%

Superannuation/retirement

44%

38%

Setting up or investing in your
own business

9%

17%

Your own or your children’s
education

32%

35%

A deposit for a home purchase

12%

15%

None

-

-

Don’t know

1%

1%

Saving for more than 1 or 2 things

(162)

(146)

Currently, significantly
more (at 95% level) are prioritising setting up their own business
than 12 months ago. This appears to be across the board, no one
group is significantly more likely to prioritise saving for starting
up their own business.

Which of these are you currently doing
to save for your retirement?

July 2000

August 2001

Paying off a mortgage on your home

45%

37%

Have a formal, long term superannuation
plan

47%

40%

Bank or term deposit investments

33%

28%

Investing in shares

31%

27%

Unit trust investments

17%

19%

Investing in your own business

17%

17%

Residential property other than
your own home

18%

19%

None

17%

23%

All Respondents

(474)

(502)

Significant differences at
the 95% level from 2000 to 2001 include fewer people paying of
their mortgage in preparation for retirement, fewer having a formal
superannuation plan and more currently doing nothing to save for
their retirement. At the 90% level, fewer people are currently
using bank or term investments for their retirement.

New Zealand Superannuation, that is the
pension that is paid by the government in retirement, is currently
$208 per week for a single person or $347 per week for a married
couple after tax at the basic rate. If you were retiring today,
would this be adequate to support you in your retirement?

July 2000

August 2001

Yes

16%

21%

No

83%

75%

Don’t know/ no answer

2%

4%

All Respondents

(474)

(502)

A significantly higher proportion
(at the 95% level) believe that the pension would be adequate
to support them currently in comparison to 2000. This movement
has been largely driven by a significant increase in people aged
18-49 years or females who believe it is adequate, along with
slight increases in other groups such as males and 65+ year olds.
Those aged 50-64 years were the only group slightly less likely
to believe the pension is adequate.

Are you confident that a similar level
of government pension will be available for you when you retire?

July 2000

August 2001

Yes

17%

19%

No

74%

72%

Don’t know/ no answer

9%

9%

All Respondents

(474)

(502)

From 2000 to 2001, no change has been recorded
in the confidence that a similar level of pension will be available
on retirement. Almost three-quarters still believe it will not
be available.

Which of the following would you expect
to be able to do when you retire?

July 2000

August 2001

Have a debt free home

91%

87%

Financially assist family

68%

58%

Buy a late model car

53%

48%

Travel or holidays

78%

77%

Recreation, e.g golf, bowls, fishing,
arts, fitness

82%

80%

Covering day to day basic living
costs

91%

88%

None

-

0%

Don’t know/no answer

1%

3%

All respondents

(474)

(502)

Currently, people do not
expect to be able to do as much on retirement as previously. At
the 95% level, significantly fewer people expect to be able to
have a debt free home (especially 18-34 year olds), and financially
assist family (especially 50-64 year olds, females and those earning
more than $50,000 per year). Slightly fewer also do not expect
to be able to buy a late model car or cover day-to-day living
costs.

Do you anticipate selling your family
home and moving to a smaller home when you retire?

July 2000

August 2001

Yes

50%

48%

No

38%

37%

Don’t know

13%

15%

All Respondents

(474)

(502)

Around half of the respondents
will sell their family home in favour of a smaller house when
they retire, while a just over third will not do so. This has
remained unchanged from 2000 to 2001.

Do you expect to make a profit on the
sale of your family home when you retire?

July 2000

August 2001

Yes

83%

76%

No

13%

18%

Don’t know

4%

6%

Sell family home when retired

(235)

(241)

At the 95% level, there is
a significant difference between the proportion who currently
expect to make a profit on the sale of the family home compared
to July last year, especially among 35-49 year olds or those aged
65 years+.

Do you expect to use the profit from
the sale of your family home to help fund your retirement?

July 2000

August 2001

Yes

81%

77%

No

19%

19%

Don’t know

1%

4%

Make a profit from selling family
home

(195)

(183)

No significant differences

Which of the following do you feel should
take some responsibility to provide for you in your retirement?

July 2000

August 2001

The government

54%

68%

Yourself

92%

91%

Your Family

6%

15%

The Community

3%

8%

Your Employer

17%

22%

None

-

-

Don’t know/no answer

1%

1%

All Respondents

(474)

(502)

Overall there is a movement to the wider
society taking some responsibility for providing in retirement.
Currently, significantly more (at the 95% level) believe that
the government, family, the community and employers should shoulder
some of the responsibility in retirement when compared to July
2000.

And which of these should take the greatest
responsibility?

July 2000

August 2001

The government

19%

23%

Yourself

74%

70%

Your Family

-

1%

The Community

-

-

Your Employer

1%

1%

None

1%

1%

Don’t know/no answer

4%

4%

All Respondents

(474)

(502)

While it is expected that
the wider society take some responsibility, people still generally
believe that the majority of responsibility lies with themselves
in providing for retirement, and this has not shown a significant
difference from July 2000.